1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
Exact Sciences had a mixed second quarter, with solid top-line growth offset by higher-than-expected sales costs and lower COVID-19 testing revenue. We maintain our $76 fair value estimate and no-moat rating. With the stock down about 7% afterhours, the market appears to be reacting to lower guidance caused by temporary factors. However, even if the stock decline holds, shares will remain materially overvalued, in our view.
Exact Sciences Corporation, headquartered in Madison, Wisconsin, provides cancer screening and diagnostic test products in the United States and internationally. Exact’s Cologuard screening test, a non-invasive stool-based DNA test, is a pre-cancer screening test for colorectal cancer. The company also competes in the precision oncology market with Oncotype DX, a genetic-based treatment selection test for breast, prostate, and colon cancers. With the acquisitions of Base Genomics and Thrive Earlier Detection, Exact is building a multi-cancer early screening test to detect over 14 cancers, a test that would be one of earliest entrants in liquid biopsy (blood-based) cancer screening.
